Peru: Central Bank continues to tighten monetary policy
February 27, 2011
Moreover, in order to complement the Bank's gradual rate hikes, monetary authorities raised the average reserve requirement ratio (RRR) for a second consecutive month. On 27 February, monetary officials announced another RRR hike of 25 basis points, affecting both national (PEN) and international (USD) deposits, effective on 1 March. Amid concerns of a further appreciation of the Peruvian sol as a result of higher interest rates, the Central Bank continued to intervene in the exchange market. At its latest intervention on 11 February, the Bank purchased USD 130 million at an average rate of PEN 2.765 per USD. The movement represented the sixth intervention so far this year to reach a total purchase of USD 497 million. Last year, the Central Bank purchased a total of USD 8.9 billion.
Author: Ricardo Aceves, Senior Economist